Moneyball and the Talent Mismatch Facing Business

When I first read Moneyball: The Art of Winning An Unfair Game (the book that inspired the movie that opened this past weekend), I was struck by the similarities of the challenges that General Manager Billy Beane faced in 2002 to those that business employers face as they try to achieve the best returns on their talent investments. When Billy Beane took charge of the Oakland A’s he was tasked with building a winning team, but to do that he had to compete in the talent market against teams that could afford to pay players triple what his budget allowed. On top of that huge recruiting disadvantage, he recognized that the selection model teams were using was more than a century old.

In the three years since I read Moneyball, the talent crisis has only deepened. Annually, my firm ManpowerGroup conducts a global Talent Shortage Survey [pdf], and remarkably, from 2010 to 2011, the percentage of employers in the U.S. reporting difficulty filling jobs jumped from 14% to 52%. That response might seem crazy considering that there are 14 million people unemployed in the U.S. and 3.1 million open jobs. But the fact is that these employers do report a “lack of available talent.” Clearly what we are seeing is a talent mismatch: Asked why they were having such problems, employers cited three main reasons: inability to meet candidates’ pay expectations, lack of specific (technical/hard) skills, and lack of experience. Workers may be available, in other words, and may have skills, but they’re not the ones employers need today or accessible at a price managers’ budgets allow them to pay.

In this new reality, managers will have to become as thoughtful, strategic, and fearless as Beane was to develop new strategies to close the gap between their business aspirations and the talent that is available. How did Beane manage to sign players who were less expensive while still fielding a squad that could compete with the best? He changed the game by rethinking every tool, mindset, and ingrained assumption on talent. He defied more than 130 years of conventional baseball wisdom by creating a data-driven talent strategy for piecing together a winning team.

In particular, Beane realized he couldn’t chase the all-around stars so he decided instead to look for the hidden gems whose more uneven and specialized strengths had been overlooked by other managers and scouts. To tap into this pool, Beane first determined precisely the specialized skills he needed to win—the ability to get on base often, for example—and then mined the terabytes of statistical data that were newly available on the Internet to identify those players who had them. Then he determined the mix of such talent that would comprise a successful team.

In the same way, business leaders can rethink their talent sources, work models, and people practices. By making smart investment decisions and tradeoffs, they too can succeed without having to chase the too few players who have it all.

Constructing work differently to take advantage of the specialized talent that is currently available can create a huge competitive advantage. This is exactly what Billy Beane did. He looked at what needed to be accomplished in a completely new way. He translated the work that the team had to do in every inning into specialized sets of skills, and then sought out talent who had demonstrated those skills consistently. The players may not have individually racked up outstanding career stats—at least in traditional terms—but their collective performance consistently won games, and at a much lower cost.

Some business leaders are finding ingenious new approaches to sourcing talent. In an article Tom Malone, Rob Laubacher and I recently coauthored for HBR, we describe one way to construct work differently. Our research revealed that a promising approach to getting knowledge work done better, faster, and more cheaply is to take jobs that are traditionally multifaceted and require a broad skill set and divide them into smaller and smaller pieces that can be distributed to “hyperspecialized” workers who do just those pieces extremely well. In interviewing some of these highly specialized workers for the article, I was struck by how keenly competitive they were about developing a winning skillset. They were as disciplined about “getting fit” for the work of, say, developing software code as any players showing up for Spring Training.

Think of it as Billy Beane’s strategy applied to developing a winning business team. Companies that strategically segment their work and deeply understand the skills, capabilities, and experience needed now and in the future can assemble a group of highly motivated and engaged players into a non-obvious winning team. Indeed, after just three years of work to assemble and groom his winning team, Beane saw them make the postseason for four successive years—no mean feat given that only eight teams out of thirty can get that far.

And what should we conclude from the fact that the Oakland A’s advantage turned out to be short-lived? Once the new winning strategy became known, anyone could adopt it—and they did. That doesn’t mean the game is over. Rather, it means the challenge goes on. Billy Beane didn’t just show baseball a new way to put together a club. He taught leaders everywhere to keep questioning old talent selection and management models, and to keep finding new ways to field a winning team.

Tammy Johns, formerly the senior vice president for innovation and workforce solutions at ManpowerGroup, is the CEO of Strategy and Talent Corporation.

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